In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 02-3078

BRION M. STORM,

Plaintiff-Appellant,

v.

ROBERT Z. STORM,

Defendant-Appellee.

____________

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 02-C-219—David F. Hamilton, Judge.

____________

ARGUED FEBRUARY 27, 2003—DECIDED MAY 13, 2003

____________

Before KANNE, DIANE P. WOOD and EVANS, Circuit

Judges.

KANNE, Circuit Judge. The facts of this family inheritance dispute center around the role Robert Z. Storm had,

if any, in persuading his mother Evelyn Storm, to change

the terms of her will and revocable trust. In 1993, Evelyn

executed a revocable trust agreement, creating the Evelyn

F. Storm Trust, into which she transferred a significant

amount of her property. At that time, the terms of the

trust provided in part that her son Robert would receive

$20,000 from her estate upon her death, while her grandson

Brion M. Storm would receive various items of personal

property as well as one-half of the residue of her estate.

Despite various amendments to the original trust agree-
2 No. 02-3078

ment, until January 2000 Brion continued to be listed as

a beneficiary entitled to one-half of the residue.

In late 1999, Evelyn suffered a serious stroke, and in

December of that year, Robert moved her from Illinois to

his home in Indianapolis, Indiana. After the move, Evelyn

made several changes to her testamentary documents: on

January 18, 2000, approximately six weeks after she was

moved to Indianapolis, Evelyn executed a new will and a

new trust agreement, which no longer included Brion as a

beneficiary. On October 31, 2000, Evelyn once again executed a new will and an amendment to the trust, naming

Robert as the sole beneficiary of her estate. Evelyn died

on March 14, 2001.

On February 7, 2002, Brion filed this complaint as a

diversity action under 28 U.S.C. § 1332. He alleged that

before December 1999, he had a significant inheritance

expectancy under the terms of Evelyn’s trust. He further

contended that sometime in 2000, Robert exerted undue

influence on his mother Evelyn, causing her to execute

a new will and a new trust naming Robert the sole beneficiary of her estate, thus tortiously interfering with

Brion’s inheritance expectancy.

Robert moved to dismiss Brion’s complaint under Federal

Rule of Civil Procedure 12(b)(1), arguing that the district

court lacked subject matter jurisdiction over the claim,

as this was essentially a probate matter. The district

court granted Robert’s motion to dismiss, finding that

Brion’s lawsuit “is so closely related to a probate proceeding as to fall within the probate exception” to federal

jurisdiction. Storm v. Storm, No. IP 02-219-C H/K, 2002

U.S. Dist. LEXIS 14732, at *2 (S.D. Ind. July 15, 2002). We

agree that jurisdiction here is lacking, and affirm the

dismissal of Brion’s claims.
No. 02-3078 3

1 The parties dispute the appropriate standard of review. Robert

argues that our review is only for an abuse of discretion by the

district court, citing language from our decision in Loyd v. Loyd,

731 F.2d 393, 397 (7th Cir. 1984) (“[W]e will treat the case on the

basis of the particular facts here as involving an exercise of

discretion and hold that there was no abuse of that discretion. In

candor, if the district court had found originally that the probate

exception was applicable, we doubt we would have faulted him.”)

and Rice v. Rice Found., 610 F.2d 471, 477 (7th Cir. 1979) (“Even

where a particular probate-like case is found to be outside the

scope of the probate exception, the district court may, in its

discretion, decline to exercise its jurisdiction.”).

In this case, the district court found that it was without

jurisdiction to hear this lawsuit—that is a conclusion quite

different from finding jurisdiction exists but declining to exercise

it (an abstention case like that referred to in Rice). Review of

abstention decisions presents a different matter from the review

of determinations that subject matter jurisdiction does not exist

at all. To the extent that Loyd speaks of discretion, we believe

that language is best characterized as expressing a certain

deference to the district court’s greater familiarity with a particular State’s probate law and court system, as well as an

acknowledgment that the probate exception is not clearly delineated nor “a hard and fast jurisdictional rule.” Loyd, 731 F.2d

at 397. Because the existence of subject matter jurisdiction goes

to the ultimate question of whether the federal courts have the

power to entertain and decide a case, we emphasize that our

review in such situations is de novo.

ANALYSIS

We review a district court’s decision to dismiss a complaint for lack of subject matter jurisdiction de novo.

1 Iddir

v. INS, 301 F.3d 492, 496 (7th Cir. 2002). For purposes

of our review, we accept as true the well-pleaded factual

allegations in the plaintiff’s complaint, drawing all reasonable inferences in favor of the plaintiff. Id.

We begin with the well-established rule that “a federal

court has no jurisdiction to probate a will or administer
4 No. 02-3078

an estate.” Markham v. Allen, 326 U.S. 490, 494 (1946);

see also Dragan v. Miller, 679 F.2d 712, 713 (7th Cir. 1982).

Under the so-called “probate exception,” even when the

requirements of diversity jurisdiction have been met—the

parties are diverse and the amount in controversy exceeds

the jurisdictional threshold, see 28 U.S.C. § 1332(a)(1)

(2003)—a federal court nonetheless lacks jurisdiction over

cases involving probate matters. This jurisdictional exception, entirely the creation of the courts, was originally

justified on historical grounds. See Dragan, 679 F.2d at

713; Rice v. Rice Found., 610 F.2d 471, 475 & n.6 (1979).

Since its earliest invocations in the courts of this country, see Farrell v. O’Brien, 199 U.S. 89, 101-10 (1905)

(discussing several early cases to have considered the

question of federal jurisdiction over probate matters), the

exception has become an established feature of our federal judicial system.

This Court has noted that the precise contours of the

probate exception have not been—nor really can be—clearly

defined. See Georges v. Glick, 856 F.2d 971, 973 (7th Cir.

1988); Loyd v. Loyd, 731 F.2d 393, 397 (7th Cir. 1984). The

exception is rather easily applied to “pure” probate

matters—i.e., those involving the administration of an

estate or the actual probate of a will. Rice, 610 F.2d at

475. Where difficulties arise is in determining whether

certain matters beyond “pure” probate issues are nonetheless “ancillary” to the core probate activities to such a

degree that they too fall within the exception. See Dragan,

679 F.2d at 715; see also Farrell, 199 U.S. at 110 (finding

that a federal court lacked jurisdiction over a suit to set

aside the probate of a will “when the remedy to set aside

afforded by the state law is a mere continuation of the

probate proceeding, that is to say, merely a method of

procedure ancillary to the original probate, allowed by the

state law for the purpose of giving to the probate its

ultimate and final effect” (emphasis added)).
No. 02-3078 5

Thus, as we stated in Dragan, the process of determining

whether a state-law action should fall within the probate

exception involves the concept of “ancillarity,” which itself

“is an invitation to apply a concept—here the concept

of probate—pragmatically.” Dragan, 679 F.2d at 715. This

means that “labels” should not be a dispositive factor in

our analysis. Id. at 716-17. Rather, in Dragan, we adopted a “practical approach” to determining the boundaries of the probate exception. Id. at 715. We directed

courts to consider the policy goals underlying the exception to determine whether the court had jurisdiction over

a particular case—that is, a suit is considered ancillary

to a probate proceeding, and thus within the exception,

if “allowing it to be maintained in federal court would

impair the policies served by the [exception].” Id. at 715-

716. We have also cautioned that the probate exception,

as a judicially created exception to the statutory grant

of diversity jurisdiction, should be construed narrowly.

See Georges, 856 F.2d at 973 (citing Rice, 610 F.2d at 475).

In Dragan and subsequent cases, we identified several

practical bases for the exception. One practical reason for

excluding probate matters from federal jurisdiction, albeit

not the strongest one, is to encourage legal certainty—

that is, to ensure that the outcomes of probate disputes

will be consistent by limiting their litigation to one court

system, rather than providing disputants the choice

between two. Dragan, 679 F.2d at 714. A second goal

is to promote judicial economy. Id. The process of determining and effectuating a decedent’s testamentary wishes

will generally begin in a state court. “If the probate proceeding thus must begin in state court, the interest in

judicial economy argues for keeping it there until it is

concluded.” Id. “By restricting probate matters and will

contests to state courts, questions as to a will’s validity

can be resolved concurrently with the task of estate administration.” Georges, 856 F.2d at 974. This serves to
6 No. 02-3078

preserve the resources of both the federal and state judicial systems and avoids the piecemeal or haphazard resolution of all matters surrounding the disposition of the

decedent’s wishes.

We have referred to “relative expertness” as another

practical reason for the exception. Dragan, 679 F.2d at

715. Because state courts have nearly exclusive jurisdiction over probate matters, state judges vested with probate

jurisdiction develop a greater familiarity with such legal

issues. A final practical reason for having an exception is

to avoid unnecessary interference with the state system

of probate law. Georges, 856 F.2d at 974. This reason is

actually a consequence of the other rationales: if state

courts have the exclusive task of probating a will, and

thus develop the relative expertise to do so (including the expertise to deal with all matters ancillary to

probate), then federal court resolution of such matters is

unlikely to be more than an unnecessary interference

with the state system.

This case does not involve the administration of an

estate, the probate of a will, or any other “pure” probate

matter. The question for this Court then is whether the

action brought by Brion should be considered ancillary to

a probate proceeding, thus depriving the federal courts

of jurisdiction. The district court found that this lawsuit

was in “substance and effect” a will contest, and as such

was ancillary to a probate proceeding and covered by the

probate exception. Storm, 2002 U.S. Dist. LEXIS 14732,

at *10, *19-20. Brion essentially raises two arguments as

to why the exception is nevertheless inapplicable. First,

he contends that this is a tort action rather than a will

contest. Second, he argues that this case involves the terms

of a trust rather than a will.

At bottom, the first issue Brion faces is whether his

complaint, though framed in terms of the state law tort
No. 02-3078 7

of interference with an inheritance expectancy, is in substance a will contest, and thus properly considered an

action ancillary to pure probate proceedings. Wrongful

interference with an inheritance expectancy is a recognized tort in Indiana; such an action may be brought

in a court of general jurisdiction, provided a will contest

is unavailable to supply an adequate remedy. Minton v.

Sackett, 671 N.E.2d 160, 162-63 (Ind. Ct. App. 1996); see

also RESTATEMENT (SECOND) OF TORTS § 774B (1979). But

as we have just observed, mere labels—whether an action

is styled as a tort action or will contest—are not decisive

in our probate-exception analysis.

We note that what Brion seeks is a legal determination

that the terms of Evelyn’s final will and trust, executed

in October 2000, are invalid because they were allegedly

procured through the exertion of undue influence by

Robert. Brion claims that the change in the terms of the

will and trust worked to his detriment by frustrating his

established inheritance expectancy. He therefore seeks

damages, presumably to be measured in part by what

he would have received had Evelyn’s actual testamentary

wishes, as expressed in the previous will and trust, governed the disposition of her assets (he also seeks exemplary

or punitive damages). While Brion phrases his action as

one involving tortious interference with his inheritance

expectancy, the practical effect of his lawsuit would be

similar to that of a successful will contest: the terms of

the final, allegedly invalid testamentary instruments

would essentially be bypassed, while Brion would receive,

as damages, the assets he would have otherwise been

entitled to under what he says are Evelyn’s actual will

and trust. Cf. Dragan, 679 F.2d at 716 (noting that a

lawsuit seeking the imposition of a constructive trust

would, if successful, cause an estate to pass through the

intestacy statue—thus, “this is not the form of the action

but would be its practical effect if it succeeded” (emphasis

added)).
8 No. 02-3078

2 In addition to the trust, Evelyn left a will, but it is unclear

whether or when that will would be submitted for probate in the

Indiana courts. The district court noted that it had no information as to the future disposition of the will or estate. Storm,

2002 U.S. Dist. LEXIS 14732, at *5. We simply note that if this

will is admitted to probate at some future time, the claim raised

by Brion in this lawsuit would more appropriately be included

as part of those proceedings, thus implicating both the judicial

economy and the unnecessary interference policy rationales.

3 The district court determined that:

In the state courts, Brion’s claim would be heard by the

Probate Division of the Marion Superior Court, which has

both general and specialized jurisdiction. See Ind. Code §§ 33-

5.1-2-4 and -2-9. The Superior Court is a court of general

jurisdiction, including probate matters, Ind. Code § 33-5.1-2-

4(2), but Indiana statutes plainly establish a specialized

jurisdiction for the Superior Court’s Probate Division. The

legislature instructed the Marion Superior Court to adopt

rules of the court dividing the work of the court among

divisions, including a Probate Division. Ind. Code § 33-5.1-2-

(continued...)

An examination of the practical reasons for having a

probate exception demonstrate that Brion’s tort action

is simply an attempt to “call[ ] a will contest an action in

tort.” Id. at 717. As such, we agree with the district court

that this case belongs in state court.

Granted, the fact that no will has yet been admitted to

probate and thus no state-court probate proceedings

have been initiated2

 weighs against dismissal in order to

conserve judicial resources or avoid interference with

ongoing proceedings. But dismissal is nonetheless appropriate here because Indiana law would require that

Brion’s tort claim be heard in the probate division of the

Marion Superior Court, a state court which hears testamentary disputes more often than any federal court. See

Storm, 2002 U.S. Dist. LEXIS 14732, at *16-17.3

 The
No. 02-3078 9

3 (...continued)

9(c). Indiana statutes give the Probate Division jurisdiction

over issues of trusts as well as wills. Ind Code § 30-4-6-1

(“Jurisdiction in this state for all matters arising under this

article [Trust Code] shall be with the court exercising probate

jurisdiction.”). That probate jurisdiction includes the power

to rescind or reform a trust. Ind. Code § 30-4-3-25. Thus,

Indiana law would assign Brion’s claims to the Probate

Division of the Marion Superior Court.

Storm, 2002 U.S. Dist. LEXIS 14732, at *16-17.

district court noted that this case would “present precisely

the sorts of issues that would arise in a will contest.” Id.

at *14. Given that federal courts rarely, if ever, deal with

such matters, and that the Indiana state courts are

vastly more familiar with the factual and legal issues

involved, dismissal in this case is consistent with the

policy behind the probate exception.

Brion argues that Indiana does not have a state policy

of channeling probate or probate-like cases into specialized courts, as the State has vested jurisdiction over

probate matters in the state courts of general jurisdiction.

He acknowledges that Marion County, Indiana has a

Probate Division as part of the superior court system, but

he suggests that this Court has said that such internal

divisions of a court of general jurisdiction should have

no bearing on our analysis:

[The State of Illinois] has abolished separate probate

courts and vested the probate jurisdiction in its courts

of general jurisdiction, the circuit courts. The Cook

County circuit court has subdivided itself into divisions, one of which is the probate division; but this

organizational refinement has no jurisdictional significance. “Since both the probate division and the law

division are . . . simply divisions of the same constitutional court of general jurisdiction, it follows neces-
10 No. 02-3078

sarily that both of these tribunals could have had

equal and concurrent subject matter jurisdiction over

the [matter at issue].”

. . . [R]etention of federal diversity jurisdiction over

such cases will not interfere with the state policy

of channeling all probate matters to specialized courts.

Hamilton v. Nielsen, 678 F.2d 709, 710 (7th Cir. 1982)

(citations omitted) (quoting Alfaro v. Meagher, 326 N.E.2d

545, 548-59 (Ill. App. Ct. 1975)). Brion cites another case

in which we affirmed federal jurisdiction, where we

noted that the district court “was impressed that probate

matters in Indiana are relegated to courts of general

jurisdiction rather than to a specialized probate court.”

Loyd, 731 F.2d at 397.

Brion suggests that this language indicates that the

district court was wrong to find that this factor weighed

in favor of dismissal, because even if his case would be

referred to the probate division of the Marion Superior

Court, that is merely an internal division of a court of

general jurisdiction. We think Brion misreads our emphasis in Hamilton. In that case, we affirmed federal court

jurisdiction over a lawsuit in which a will beneficiary

sought an award of money damages from the executors

of the will for alleged negligence in the management of

the estate. Hamilton, 678 F.2d at 710. Important to our

analysis in that case was the fact that probate of the will

in state court had essentially concluded and the federal

suit did “not involve the validity or construction of the

will or seek to change the distribution of the assets of the

estate decreed by the circuit court.” Id. In determining

whether the case came within the probate exception, we

emphasized that no probate-like issues were involved—

those issues had previously been determined by the Illinois state court and were not challenged in the federal

suit. Given that, the fact that Illinois no longer had legisla-
No. 02-3078 11

tively mandated, specialized probate courts had “no jurisdictional significance” to our analysis. We continue to

believe that the organizational divisions of courts of general jurisdiction (like that of the Marion Superior Court)

have “no jurisdictional significance” for federal courts

when no probate-like issues are involved.

When probate-like matters are at issue in a dispute,

however, we reiterate that it is significant to our analysis that state courts vested with probate jurisdiction are

much more familiar than are federal courts with the

factual and legal issues involved. Indeed, in Hamilton,

this Court went on to assert that, “This is not to say, of

course, that federal courts can now probate wills in Illinois because the state has abolished its specialized probate courts. Probate remains a peculiarly local function

which federal courts are ill equipped to perform.” Id. This

tort action is, for practical purposes, closely related to a

will contest, and thus ancillary to a pure probate case.

Because this case raises probate-like issues, it falls

within the probate exception despite its characterization

as a tort suit.

Brion also argues that the probate exception is inapplicable to this case because the dispute involves an inter

vivos trust, which includes specific provisions for the

disposition of the trust res upon Evelyn’s death, rather

than a will. As the district court noted, had Brion alleged

that Robert exerted undue influence on Evelyn that

caused her to modify the terms of her will, rather than the

terms of her trust, dismissal would have been the clear

result. Storm, 2002 U.S. Dist. LEXIS 14732, at *10-11. But

that is not the case here—and we must determine whether the use of a trust to convey testamentary wishes,

rather than a will, requires a different result.

This Court has previously refused to adopt a per se rule

making the probate exception inapplicable when the
12 No. 02-3078

testamentary instrument at issue is a trust rather than

a will. Georges, 856 F.2d at 974 n.2. In Georges, we said

that “[t]he inter vivos trust [at issue in the case] is clearly

a will substitute. However, the fact that this case does

involve a will substitute does not automatically render

the probate exception applicable.” Id. (citing Dragan, 679

F.2d at 715). Instead, we turn again to our practical

approach, looking to the policies underlying the probate

exception, to determine if Brion’s lawsuit belongs in

state court. For the same reasons that the exception applies to this suit despite its characterization as a tort

action, we believe the exception applies despite this

being a dispute over the terms of an inter vivos trust

rather than a traditional will.

Given the growth in recent years of various “will substitutes,” we are loath to throw open the doors of the federal courts to disputes over testamentary intent simply

because a decedent chose to use a will substitute rather

than a traditional will to dispose of his or her estate. We

believe that our practical approach to determining whether the probate exception to diversity jurisdiction applies

is an appropriate means by which to judge whether disputes surrounding such will substitutes should be within

the jurisdiction of the federal courts.

CONCLUSION

Because we agree with the district court that “[a]s

a practical matter, this case is indistinguishable from a

will contest,” Storm, 2002 U.S. Dist. LEXIS 14732, at *14,

we find that the probate exception applies despite the

characterization of this case as a tort action and despite

the use of an inter vivos trust rather than a traditional

will. Dismissal of the action for lack of subject matter

jurisdiction is therefore AFFIRMED.
No. 02-3078 13

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—5-13-03